Earnings

Financially Devastating or Fantastic? – iQIYI, Inc. (IQ), Crocs, Inc. (CROX)

The shares of iQIYI, Inc. have increased by more than 24.37% this year alone. The shares recently went up by 1.58% or $0.3 and now trades at $19.34. The shares of Crocs, Inc. (NASDAQ:CROX), has jumped by 28.72% year to date as of 04/13/2018. The shares currently trade at $16.27 and have been able to report a change of -1.87% over the past one week.

The stock of iQIYI, Inc. and Crocs, Inc. were two of the most active stocks on Friday. Investors seem to be very interested in what happens to the stocks of these two companies but do investors favor one over the other? We will analyze the growth, profitability, risk, valuation, and insider trends of both companies and see which one investors prefer.

Profitability and Returns

Growth alone cannot be used to see if the company will be valuable. Shareholders will be the losers if a company invest in ventures that aren’t profitable enough to support upbeat growth. In order for us to accurately measure profitability and return, we will be using the EBITDA margin and Return on Investment (ROI), which balances the difference in capital structure. The ROI of IQ is 28.80% while that of CROX is 5.40%. These figures suggest that IQ ventures generate a higher ROI than that of CROX.

Liquidity and Financial Risk

The ability of a company to meet up with its short-term obligations and be able to clear its longer-term debts is measured using Liquidity and leverage ratios. The current ratio for IQ is 0.50 and that of CROX is 2.70. This implies that it is easier for IQ to cover its immediate obligations over the next 12 months than CROX.

Analyst Price Targets and Opinions



The mistake some people make is that they think a cheap stock has more value to it. In order to know the value of a stock, there is need to compare its current price to its likely trading price in the future. Looking at its rival pricing, CROX is at a 19.02% relative to its price target of 13.67.

Conclusion

The stock of Crocs, Inc. defeats that of iQIYI, Inc. when the two are compared, with CROX taking 5 out of the total factors that were been considered. CROX happens to be more profitable, generates a higher ROI, has higher cash flow per share, higher liquidity and has a lower financial risk. When looking at the stock valuation, CROX is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for CROX is better on when it is viewed on short interest.

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